Another 'Blue Wave Shock' Plunges Kospi, Barely Defending 5,000 Level

[Anchor]

The "blue tsunami" in the US midterm elections has once again shaken the South Korean stock market. The Kospi plummeted 6% today (Nov. 6) alone, barely managing to hold onto the 5,000 threshold. Having fallen helplessly since the second half of this year, the domestic stock market has plunged an additional 11% in just two days following the US midterm elections. Semiconductor stocks, which account for a large portion of the South Korean stock market, took a direct hit, and trading was temporarily halted in early morning trading.

For our first news item, reporter Yoo Soo-Hwan has the details.

[Reporter]

The Kospi plummeted right at the market open.

Just three minutes into the trading session, it plunged over 8%, immediately triggering a circuit breaker and causing it to surrender the 5,000 level.

This marks the first time in nine months since February that the Kospi has fallen back into the 4,000 range during intraday trading.

It ultimately closed down 6%, bringing the total plunge to 11% over the past two days including yesterday.

This was the direct result of absorbing the impact of the US stock market overnight.

The tech-heavy Nasdaq index plummeted 5.5%, while the S&P 500, which tracks the stock prices of 500 major companies, crashed 4.3%.

This is interpreted as the result of fears intensifying two days after the election that regulations on the artificial intelligence industry and data centers will become stricter within the United States following the Democratic Party's landslide victory.

In particular, the Philadelphia Semiconductor Index, which tracks the stock prices of major semiconductor companies, crashed by over 12%, dealing a blow to South Korean semiconductor and AI-related companies.

[Song Jae-kyung / Head of Investment Division, Dimension Investment Advisory: Since the US makes such massive investments and does everything with Samsung and Hynix to bring in money, right? Looking at it that way, the US needs to stabilize first. The US market itself. So, the concerns in the US regarding AI investment need to be calmed to a certain extent....]

SK Hynix plummeted over 10% and Samsung Electronics dropped more than 6%, causing their market capitalizations to shrink by more than half in four months.

Even Hyundai Motor and Kia, which had gathered expectations for reduced tariffs, turned downward today.

The government quickly instructed securities firms to reduce the proportion of forced liquidations even if stocks purchased on debt decline in value.

However, it remains to be seen whether this will have an effect on calming investor sentiment, particularly among foreign investors.

(Photo: Yonhap News)
(Video: Kim Se-kyung | Video Editing: Lee Sang-min)
※ Please note: This article was translated by AI and may contain errors.